Formerly the European Community, it was established by the
Maastricht Treaty of December 1991 to expand European cooperation
from economic and commercial into monetary, security and judicial
matters. It officially came into being at the end of 1993.

A wide belt of sea and seabed adjacent to the national
boundaries where the state claims preferential fishing rights and
control over the exploitation of mineral and other natural
resources. Madagascar claims a 150-nautical-mile exclusive economic
zone. Mauritius, Comoros, Seychelles, and Maldives all claim 200
nautical miles. Boundary situations with neighboring states
sometimes prevent the extension of the exclusive economic zones to
the full limits claimed.

A value measure of the flow of domestic goods and services
produced by an economy over a period of time, such as a year. Only
output values of goods for final consumption and intermediate
production are assumed to be included in the final prices. GDP is
sometimes aggregated and shown at market prices, meaning that
indirect taxes and subsidies have been eliminated, the result is
GDP at factor cost. The word "gross" indicates that deductions for
depreciation of physical assets have not been made. See
also gross national product.

Gross domestic product (q.v.) plus the net income or
loss stemming from transactions with foreign countries. GNP is the
broadest measurement of the output of goods and services by an
economy. It can be calculated at market prices, which include
indirect taxes and subsidies. Because indirect taxes and subsidies
are only transfer payments, GNP is often calculated at factor cost,
removing indirect taxes and subsidies.

Established along with the World Bank (q.v.) in 1945,
the IMF is a specialized agency affiliated with the United Nations
and is responsible for stabilizing international exchange rates and
payments. The main business of the IMF is the provision of loans to
its members (including industrialized and developing countries)
when they experience balance of payments difficulties. These loans
frequently carry conditions that require substantial internal
economic adjustments by the recipients, most of which are
developing countries.

The first Lomé Convention (Lomé I) came into force in 1976,
Lomé II came into effect in 1981, and Lomé III came into force in
1985; Lomé IV came into effect in 1990. The convention covers
economic relations between the members of the European Economic
Community (EEC) and their former colonies in Africa, the Caribbean,
and the Pacific (ACP). The convention allows most ACP exports to
enter the EEC duty-free or at special rates and, among other
things, provides funds through the Stabex system (q.v.) to
offset adverse fluctuations in the prices of ACP exports.

An informal group of commercial banks that come together to
negotiate a debt rescheduling agreement with a country. The group
has two committees, an economics committee that develops economic
data projections and a negotiating committee. Committee members
usually come from the five principal banks that hold the largest
amounts of a country's debt.

The informal name for a consortium of Western creditor
countries (Belgium, Britain, Canada, France, Germany, Italy, Japan,
the Netherlands, Sweden, Switzerland, and the United States) that
have made loans or guaranteed export credits to developing nations
and that meet in Paris to discuss borrowers' ability to repay
debts. Paris Club deliberations often result in the tendering of
emergency loans to countries in economic difficulty or in the
rescheduling of debts. Formed in October 1962, the organization has
no formal or institutional existence. Its secretariat is run by the
French treasury. It has a close relationship with the International
Monetary Fund (q.v.), to which all of its members except
Switzerland belong, as well as with the World Bank (q.v.)
and the United Nations Conference on Trade and Development
(UNCTAD). The Paris Club is also known as the Group of Ten (G-10).

A member of the smaller of the two great divisions of Islam.
The Shia supported the claims of Ali and his line to presumptive
right to the caliphate and leadership of the Muslim community, and
on this issue they divided from the Sunni (q.v.) in the
major schism within Islam. Later schisms have produced further
divisions among the Shia over the identity and number of imams.
Most Shia revere Twelve Imams, the last of whom is believed to be
hidden from view.

Comprises the seven nations of South Asia: Bangladesh, Bhutan,
India, Maldives, Nepal, Pakistan, and Sri Lanka; founded as South
Asia Regional Cooperation (SARC) organization at a meeting of
foreign ministers in New Delhi on August 1-2, 1983; a second
organizational meeting of foreign ministers was held in Thimphu in
May 1985; inaugural meeting of heads of state and government in
Dhaka on December 7-8, 1985. The goal is to effect economic,
technical, and cultural cooperation and to provide a forum for
discussions of South Asia political problems.

Monetary units of the International Monetary Fund
(q.v.) based on a basket of international currencies
including the United States dollar, the German deutsche mark, the
Japanese yen, the British pound sterling, and the French franc.

A system of export earnings stabilization set up by the
European Community (EC) in accordance with the African, Caribbean,
and Pacific (ACP) states. Under the system, the EC helps developing
countries withstand fluctuations in the price of their agricultural
products by paying compensation for lost export earnings.

The larger of the two great divisions of Islam. The Sunni, who
rejected the claims of Ali's line, believe that they are the true
followers of the sunna, the guide to proper behavior set forth by
Muhammad's personal deeds and utterances. See also Shia.

Informal name used to designate a group of four affiliated
international institutions: the International Bank for
Reconstruction and Development (IBRD), the International
Development Association (IDA), the International Finance
Corporation (IFC), and the Multilateral Investment Guarantee Agency
(MIGA). The IBRD, established in 1945, has the primary purpose of
providing loans to developing countries for productive projects.
The IDA, a legally separate loan fund but administered by the staff
of the IBRD, was set up in 1960 to furnish credits to the poorest
developing countries on much easier terms than those of
conventional IBRD loans. The IFC, founded in 1956, supplements the
activities of the IBRD through loans and assistance specifically
designed to encourage the growth of productive private enterprises
in the less developed countries. The MIGA, founded in 1988, insures
private foreign investment in developing countries against various
noncommercial risks. The president and certain senior officers of
the IBRD hold the same positions in the IFC. The four institutions
are owned by the governments of the countries that subscribe their
capital. To participate in the World Bank group, member states must
first belong to the International Monetary Fund (IMF--
q.v.).